GSK posts 17% fall in half-year profits

Pharmaceuticals giant GlaxoSmithKline posted a 17% fall in half-year profits today as it continued to suffer from the impact of generic competition.

The company is the second largest pharmaceutical in the world and employs a total of over 1,400 people in Ireland.

The blue-chip group, which said copycat versions of anti-depressant drugs Paxil and Wellbutrin had eroded sales, saw pre-tax profits fall to £1.63bn (€2.4bn) in the second quarter in 2004.

But “outstanding” growth by newer products was helping it overcome competition elsewhere and meant turnover on a constant currency basis was up 2% at £5.06bn (€7.65bn).

Glaxo said asthma drug Advair and diabetes treatment Avandia performed particularly well, with their sales up 22% and 59% respectively during the three months to June 30.

The weak US dollar affected the results, and meant that operating profits fell by 9% to £1.71bn (€2.58bn), a fall of 1% when measured on last year’s exchange rates.

Although the third quarter would be challenging, Glaxo said it expected a return to earnings growth in the fourth quarter.

Chief executive Jean-Pierre Garnier said: “Outstanding sales growth for several of our key products is enabling us to overcome the impact of generic competition to Paxil and Wellbutrin.

“In particular, Advair and Avandia continue to be significant engines of growth for the company.”

GSK has manufacturing and R&D facilities in Cork and in Dungarvan, Co Waterford, and sales and marketing functions in Dublin.